News

18Dec
2014

What is HARP?

It’s pretty hard these days to avoid being bombarded by solicitations about refinancing your home via the government program – The Home Affordable Refinance Program (also known as “HARP”).  You’ve likely seen advertisements referring to “President Obama’s refinance program” promising to “lower your bills” and urging you to “act now” because the program is only available for a “limited time”.

In fact, the program was designed to (1) assist homeowners to refinance in order to reduce the interest rate and/or to lower their monthly payment, and/or (2) to “fix” the rate or to help get out of a loan with risky features.  The program was implemented in March of 2009 to address the ever decreasing home values that prohibited millions from refinancing, as they were underwater or near underwater. They accomplished this by essentially taking the appraised value of the home out of the equation which allows homeowners with little or no equity to take advantage of current market rates even if they are “underwater”.  Notwithstanding the intentions of this great program, and while helpful to many, it unfortunately applies ONLY to homeowners with mortgages owned or guaranteed by Fannie Mae or Freddie Mac.  Further, the program is quite complicated since there are many rules and conditions to qualify.  Thus, there are two key facts to identify before even bothering to consider the HARP Program –
(1) whether or not your loan is owned or guaranteed by Fannie Mae or Freddie Mac, AND (2) whether the loan was purchased by Fannie Mae or Freddie Mac on or before May 31, 2009.  These are two “make or break” prerequisites which are not addressed in most advertisements.

Without detailing the other benefits and/or underwriting guidelines, I thought it would be helpful to provide you a brief understanding of the program, the motivation behind the implementation, but most importantly, to help make the program more transparent for my valued clients and friends.  Clearly, no one wants to waste time on deceptively advertised government programs you may not qualify for.  Of course, I would be more than happy to discuss and clarify for you any other details of the program and to help determine whether you may qualify.

Best regards,

Jamey Kaufman